Buying Silence

Can a company sign an airtight “nondisparagement” agreement with a departing employee? That’s one question raised by this fascinating post at Above the Law. It reprints an email by a departing associate who essentially accuses a firm of trying to hide the real reason for her being let go. At one point she states:

As for your request for a release, non-disclosure, and non-disparagement agreement in return for three months’ pay, I reject it. Unlike you, I am not just a paid mouthpiece with no independent judgment. I will decide how and to whom to communicate how you have treated me. I find it ironic that you would try to buy the right not to be disparaged after behaving as you have. Your actions speak volumes, and you don’t need much help from me in damaging your reputation.

This is not my area, but I find work in the general field of regulation of information flow fascinating. This news story by Adam Liptak suggests that while “settlements for silence” are generally enforceable, there are several reasons why a beneficiary of one may not seek to enforce it. Richard Epstein has argued for a “better coordination” of contract and free speech law here, and his proposal would largely eliminate public policy exceptions (and First Amendment defenses) to enforcement. Epstein argues that “where true information is obtained illegally– whether by trespass, fraud, or breach of confidence or contract–the presumption should shift sharply in the other direction, so that both damages and injunctive relief are made available to the party with the right to keep that information confidential.”

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